New Jersey Sues Travel Club Operators

Attorney General targets companies for not providing discounts or rewards

June 12, 2009

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It seems pretty simple; if you sell consumers a vacation package, you'd better be able to deliver what the vacationers have paid for.

In New Jersey the state attorney general has filed suit in state Superior Court against travel club companies operating under several different names and their principal, charging that they failed to provide any services to consumers and misrepresented their relationship with hotel, airline and car rental companies through the unauthorized use of their corporate logos.

Defendants Dreamworks Vacation Club, Five Points Travel Company and Bentley Travel are accused of depicting specific resorts, regions and packages in mailings and sales presentations that, in actuality, were not available to consumers. Defendant Daryl T. Turner is the owner and operator of these companies. The investigation that led to the State’s action began with the Burlington County Consumer Affairs Local Assistance office, and was referred to the Division of Consumer Affairs for joint investigation.

Burlington County CALA Director Renee L. Borstad joined with New Jersey Consumer Affairs Director David Szuchman to announce the lawsuit at a press conference at the Division's South Jersey office in Cherry Hill.

"We believe the defendants had no intention of providing the advertised travel services. They lured consumers in with promises of deep discounts, free gifts and misrepresentations about their affiliation with respected corporations, all for the purposes of defrauding consumers and enriching themselves," said New Jersey Consumer Affairs Director David Szuchman.

"Dreamworks and its other vacation clubs offered a 'dream' vacation that was too good to be true. Consumers must realize that high-pressure sales tactics, coupled with prepaid vacation packages, plus freebee airline ticket offers are always a dangerous combination," said Burlington County CALA Director Renee L. Borstad.

"In addition to not providing the contracted-for travel packages, the defendants also did not provide the free gifts that consumers were led to believe they would receive, including seven-day cruises, round-trip airline tickets for two, hotel stays, free dinners, car rentals and/or free gas coupons. When consumers contacted the "800" telephone number listed on the mailings to claim their gifts, they were informed that they had to attend a 90-minute sales presentation for vacation packages. Even if they attended the presentations, consumers were not provided with the gifts.

Consumers paid $1,200 to $8,000 upfront to purchase a vacation package, but were not provided with the airline, hotel or other travel arrangements at the price and quality represented by defendants prior to purchase.

Dreamworks and Five Points Travel Company have business and mailing addresses in Parsippany, Morris County; Sewell, Gloucester County; and Westampton, Burlington County. Bentley Travel is not incorporated to do business in New Jersey. Turner's address of record is in Cherry Hill, Camden County.

The state's eight-count Complaint, filed in New Jersey Superior Court in Morris County, alleges that the defendants violated the Consumer Fraud Act and Advertising Regulations by:

• Utilizing the terms "Bailout", "Division of Revenue" and "Department of Funding" on mailings sent to consumers to falsely imply that the mailing originated from a state or federal government agency or department;

• In mail solicitations and other advertising materials, utilizing without authorization, the trademarks of airlines, hotels, car rental companies and restaurants;

• Forwarding mailings to consumers which indicated that consumers were entitled to complimentary gifts, when receipt of such gifts were conditioned upon attendance at a sales presentation for vacation packages;

• During sales presentations, inducing consumers to purchase vacation packages by showing them brochures with resort areas and packages that were not available;

• Advising consumers prior to purchase that they have the right to cancel the contract if they were not satisfied with the vacation package, and then refusing to permit the consumers to cancel the contract;

• Charging consumers' credit cards for fees and services that were not authorized by the consumers;

• Submitting bills to collection agencies after consumers have cancelled the contract and formally disputed the charges;

• Representing to consumers that they were members of the Better Business Bureau ("BBB") in good standing, when such was not the case;

• Failing to disclose to consumers prior to their purchase of a vacation package that they would be required to pay additional fees prior to utilizing the service;

• Requiring consumers to sign incomplete or blank sales contracts for vacation packages and then failing to provide consumers with full and accurate copies of such contracts;

• Failing to include in the contract a statement advising consumers of their right to cancel prior to the midnight of the third business day after execution of the contract.

To date, the state said it has received complaints from 198 consumers against the defendants either directly or from the Burlington County CALA Office. The state's lawsuit seeks injunctive and other relief, maximum civil penalties, consumer restitution and reimbursement of the state’s legal fees and investigative costs.

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